HOMEOWNERS have been flocking to TikTok to share their stories of surprise mortgage payment hikes.
A realtor and influencer took to social media to explain the trend.
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Matt Weatley is a broker in central Florida who shared his house payment advice with other frustrated TikTokers.
He said the confusion is understandable, as many people were never informed about the possibility of an increase in their mortgage payments.
“No one is teaching you these things,” he said in a tone video.
His video began by sharing a rant from another Florida resident who said his mortgage went from $2,300 to $3,500.
Wheatley interrupted and explained how such a drastic increase could happen.
ENEMY COMPROMISE
The reason for such a large increase in payments was likely due to an underpayment of the deposit, Wheatley said.
He explained that fixed mortgage rates, which are expected to remain stable, can still change.
This is usually due to property taxes and insurance, payments that are typically managed through an escrow.
When tax assessments mean you need to pay a higher property tax rate, your payments may increase.
However, it’s not just about that year’s payments.
Since tax assessments typically happen annually, they can be applied retroactively.
These charges may apply to a full year’s payments in addition to the new payment.
“You have to make up for the current year and last year,” Wheatley explained.
He said mortgage payments often decrease after a year of extra payments.
He estimated that his fellow Florida TikToker’s $3,500 payments will likely drop to $2,800 after a year.
Lien and Mortgage Increases Explained
What is a deposit? Why did my mortgage payment go up?
Escrow accounts are created to help homeowners cover insurance, property taxes, or other home-related expenses.
If you have a deposit, part of your monthly mortgage payment goes into the account.
The escrow management company then uses the money in the escrow account to pay taxes and insurance when those payments are due.
Essentially, escrow bundles these other charges with your monthly principal payments, making them easier to manage. The goal is to make homeowners less likely to default on payments.
If the government’s annual assessment of your home determines that property taxes will increase, escrow payments may also increase, meaning even those with fixed mortgage payments could end up shelling out more money every month.
MORTGAGE MERGER
Several other people have taken to the Internet to complain about their mortgage payments in recent months.
One said she was “scammed” by property taxes.
In her case, her newly built home had a huge property tax increase,
Although she initially paid taxes only on the land, after the house was completed she was taxed on both the land and the house.
Another owner of a newly constructed home said his payments increased by $3,000.
Others said they feel “trapped in golden handcuffs” after being guaranteed low interest rates.
A financial advisor shared tips for breaking out of these golden handcuff traps.
This story originally appeared on The-sun.com read the full story
